Sustainability in the value chain

Sustainable innovations

Innovations play a decisive role in our consistent focus on sustainability and profitable growth. In addition, we support our customers in achieving their goals in terms of climate protection, biodiversity and circularity with sustainable innovations.

In the reporting period, we laid the foundations for three new innovation growth areas, with which we aim to generate additional sales of €1.5 billion by 2032 (reference base 2023). These innovation growth areas relate to three major challenges of our time:

• Advance Precision Biosolutions: We are using biotechnology to develop biosurfactants and cosmetic and pharmaceutical solutions that improve people’s quality of life and, at the same time, protect our ecosystems.

• Accelerate Energy Transition: To become genuinely climate-neutral, we need to avoid emissions, capture more CO₂, and build a hydrogen economy.

• Enable Circular Economy: We pool our focal areas of research for a modern circular economy, help close material cycles, and pave the way for a circular future for our customers.

Through our innovation growth areas, we are concentrating on solutions for a bio-based, energy-saving, circular economy and society.

Our R&D activities are managed by the RD&I function, which comprises the R&D teams of the growth divisions, innovation management, Creavis, which is our business incubator and strategic research unit, and Evonik Venture Capital. 

Our strategic innovation unit, Creavis, serves as a business incubator for mid- and long-term projects outside the product and market focus of the Evonik Group's operational business.

Creavis currently bundles its activities in three incubation clusters:

• The Defossilation cluster helps industries become less dependent on fossil raw materials by developing high-growth solutions that make a contribution to the transition to a circular, climate-neutral economy.

• The Life Science cluster focuses on novel concepts for resource-efficient and sustainable food production for the world’s continuously growing population. Another focal area is preventing and curing diseases, especially as many people are living to an advanced age.

• Solutions Beyond Chemistry fosters traceable, safe, and circular value chains based on special application know-how and data-based solutions. These increase the transparency, effectiveness, and sustainability of industrial systems.

In the future, Creavis will focus on businesses that drive forward at least one of the three innovation growth areas.

Our venture capital activities facilitate early insight into innovative technologies and business models. By collaborating with start-ups and technology funds around the world, Evonik gains more rapid access to attractive future technologies and markets. 

The Evonik Biotech Hub develops custom-tailored, competitive solutions for its internal and external customers. For this it uses its extensive understanding of complex biological systems, microbial strain development, and biotechnological production processes up to and including large-scale production facilities, with a focus on all of Evonik’s business lines.

We place our trust in industrial biotechnology for the production of biomolecules and functional micro-organisms, such as

• highly soluble, ultra-pure collagen of non-animal origin for use in pharmaceutical and medical applications as well as in cell culture and tissue engineering;
• biosurfactants for household and cosmetic applications;
• omega-3 fatty acids, such as EPA and DHA produced from natural microalgae for animal nutrition;
• amino acids for low-protein diet formulations as a global standard for animal nutrition;
• probiotics and other feed additives to reduce the use of antibiotics in livestock farming;
• microbial ferments that are used as microbiome-friendly cosmetic active ingredients; and
• microbial surface cleaners for long-lasting cleaning effects in households and industrial facilities.

Global research network

RD&I has more than 40 locations worldwide and around 2,500 R&D employees. R&D expenses totaled €459 million in 2024. The ratio of R&D expenses to sales was 3.0 percent, compared with 2.9 percent in 2023. 

Product stewardship is our “license to operate.” Evonik monitors its products’ entire value chain from procurement of the raw materials to delivery to our industrial customers. This approach should not be confused with a complete life cycle assessment. Product stewardship also encompasses evaluating potential environmental and health risks caused by Evonik products and minimizing these wherever possible. Besides complying with all statutory requirements such as the European chemicals regulation REACH^[1], the Globally Harmonized System of Classification and Labelling of Chemicals (GHS), and specific implementing acts, product stewardship at Evonik includes voluntary commitments that go beyond these regulations. For many years, we have been committed to the international Responsible Care® initiative and the Responsible Care Global Charter of the International Council of Chemical Associations (ICCA). Evonik describes the implementation and control mechanisms for monitoring compliance in an internal product stewardship standard. The cornerstones of our approach to product stewardship are set out in a product stewardship policy published on our website. This is about future-proofing our product portfolio by replacing hazardous substances in the supply chain. At the same time, we are working on alternatives to hazardous materials in our products as part of our efforts to improve the sustainability of our portfolio.

We examine aspects of product stewardship along the value chain as part of the sustainability analysis of our business. We record and evaluate different signals in different categories. Signal categories 1 and 2 specifically relate to critical substances and regulatory trends. Signal category 3 relates to sustainability ambitions along the value chain, including for product stewardship and chemical safety, even before the introduction of corresponding regulations. PARCs with a negative rating—sales classified as transitioner or challenged—account for only a small proportion of our portfolio. We aim to keep the proportion of sales generated with products classified as challenged to below 5 percent long-term. To achieve this, we are continuously replacing hazardous substances in our products and working on alternative solutions.

Chemical safety has always been a priority for Evonik. We are aware that both substances of concern (SoCs) and substances of very high concern (SVHCs) are used in our processes and/or that these substances may arise during our production processes. SVHCs are a subset of SoCs. According to the Chemicals Strategy for Sustainability (CSS) SoCs include substances having a chronic effect on human health or the environment as well as those that prevent recycling to produce safe, high-quality secondary raw materials. SoCs comprise all substances included in the REACH SVHC Candidate List, substances with certain hazard classes as specified in Annex VI of the CLP Regulation, and substances that hamper the recycling and reuse of materials in accordance with the ESPR. In line with the REACH and CLP Regulation requirements, Evonik communicates the presence of SoCs and SVHCs in its products in the supply chain by means of safety data sheets. As a supplier of specialty chemical solutions, we sell our products to other industrial companies. Neither SoCs nor SVHCs are subject to authorization. For the first time, the ESRS require a more extensive review of and more detailed information on SoCs and SVHCs.

Evonik evaluates all substances placed on the market (> 1 metric ton p.a.). To ensure a sound basis for risk assessment, we also take into account small quantities of SoCs. Where necessary, restrictions are placed on certain usage patterns or, in extreme cases, a complete ban is issued on use in certain products. Evonik evaluates its substances using its own chemicals management system (CMS). This system lets us evaluate our substances at global level. The content of the CMS has been harmonized with the requirements of ICCA and those of REACH. Evonik strives to continuously reduce or replace SVHCs wherever possible. We actively mitigate the associated risks for employees, customers, and the environment through advanced technologies and various risk management actions, ensuring safe production and use. As an extension of the CMS, our Chemicals Management System^PLUS is used for products containing more than 0.1 percent of SVHCs. Our aim is to reduce or replace these wherever possible.

Target 

• Include and evaluate substances/products from acquisitions in CMS/CMS^PLUS by the end of 2026

We have set ourselves the voluntary target of including and evaluating by the end of 2026 substances added to our portfolio through acquisitions between 2021 and 2023. Similarly, we aim to include and evaluate by the end of 2026 products added to our portfolio through acquisitions between 2021 and 2023 within CMS^PLUS.

Evonik regards circular economy as a fundamental transformation of economic activity. Circular economy is a system-oriented approach covering industrial processes and economic activities along the entire value chain. It aims to achieve a climate-neutral, resource-efficient economy which preserves the value of products, materials, and resources for as long as possible. Circular economy means decoupling economic growth and the use of resources by returning valuable raw materials to the loop at the end of their useful life. Better use of resources is a top priority for Evonik. Likewise, the circular economy is becoming increasingly important to Evonik in view of our planet’s limitations. Growing scarcity of raw materials may lead to inadequate resource availability in the supply chain. Activities such as the diversification of raw materials enable us to enhance the reliability of supply for production, helping reduce our reliance on finite fossil-based and other non-circular resources. As a specialty chemicals company, Evonik is an integral part of various value chains and has in-depth knowledge of and expertise in the processes, technologies, opportunities, and risks of upstream and downstream players. Circular economy thus opens up new business opportunities and attractive growth potential for Evonik. 

Circular economy involves looking at the entire life cycle of products. We endorse all business activities, technologies, and innovations that help speed up ecologically and economically viable actions to promote circular value chains. In the reporting period, we adopted a policy on the circular economy and use of resources, which we published on our website.

As a specialty chemicals company, Evonik is primarily at the heart of various value chains. That makes refining our products and technologies and changing our raw material platforms fundamental to achieving a circular economy. Alongside our own aspirations, major drivers include the increasingly stringent regulatory requirements coupled with the voluntary commitments of our customers and other companies—like the manufacturers of end products—along the value chain, as they are defining ever more ambitious plans to reduce CO₂ as well as targets for the use of circular materials. Working with partners at every link in the value chain is key to Evonik’s successful role in the transformation to a circular economy.

One ongoing challenge is the limited availability of circular raw materials. These include renewable or bio-based, recycled, and CO₂-based raw materials. Of these, Evonik almost exclusively uses renewable raw materials. We are endeavoring to increase the proportion of circular raw materials. For example, we make use of bio-based raw materials in our fermentative production processes, with sugars such as dextrose and saccharose used as substrates for the production of amino acids, rhamnolipids, and sophorolipids. Additionally, natural fats and oils and their derivatives are used to produce precursors for the cosmetics, detergents, and cleaning agents industries as well as in technical processing aids. Renewable raw materials are among the goods that are to be given particularly careful consideration in the procurement process, especially with a view to ecology and the reliability of supply. Consequently, they are subject to special examination. At the same time, Evonik views the circular economy as an opportunity to switch its procurement of critical raw materials, as defined in the EU Critical Raw Materials Act, to circular sources. 

Through our global circular economy program, we are expediting our business activities toward a circular economy by integrating all business lines at Evonik. We review both the circularity of raw materials of all types and the value chains in all of Evonik’s markets.

Our approach to waste management follows a clear principle: The first priority is to avoid waste; otherwise, waste should be recycled or used to generate energy. If this is not possible, and then only as a third option, it should be disposed of safely. Optimization of production processes contributes to avoiding and minimizing waste. That includes in-plant reprocessing of substance streams and the use of highly specialized catalysts to minimize side reactions. Where waste is unavoidable, material or energy recovery takes precedence. 

Targets 

• Generate at least €1 billion in additional sales with circular products and technologies by 2030

• Reduce specific production waste volume by 10 percent relative to production volume between 2021 and 2030

Through the global circular economy program, Evonik—in cooperation with internal and external partners—intends to help make circularity possible. This is also reflected in our target of generating at least €1 billion in additional sales with circular products and technologies by 2030. Circular products and technologies pave the way for design geared to enhancing circularity, the use of circular raw materials, extended useful lives as well as improved recycling processes and recyclate quality. While business areas associated with plastics and related applications have been the biggest contributors to date, other Evonik business areas are now emerging on the road to meeting our targets. 

Moreover, between 2021 and 2030, we aim to reduce the volume of specific production waste relative to production volume by 10 percent. We plan to achieve this by implementing a wide range of actions at our production sites. These actions were identified, for example, within the scope of the EAGER project.

Our voluntary targets adopted by the executive board are aimed at the top level of the waste management hierarchy, waste prevention.

Actions

Our global circular economy program comprises short- to medium-term actions with a clear focus on business developments. Examples of these actions include:

• The use of circular raw materials
• The development of solutions for mechanical and chemical recycling technologies
• The identification of business opportunities and the development of circular business models
• The intensive examination and structuring of new value chains

Evonik breaks down its activities into the areas of raw materials procurement, waste and resource management in its own production, and solutions that make circularity possible.

Evonik has a significant influence on the environment and society through its procurement volume. By working closely with our suppliers, we aim to help prevent breaches of human rights and environmental violations in the supply chain. We strive to counter a lack of transparency and inadequate traceability in the supply chain. Our procurement organization also contributes to mitigating operational and reputational risks for Evonik, ensuring the long-term reliability of supply for the production of Evonik products, and securing competitive advantages for our operating businesses by avoiding negative impacts on our direct suppliers’ employees as well as employees in our deeper supply chains. The “Actions” section describes our activities to mitigate risks, ensure positive impacts on the people in our supply chains and on Evonik, and assess their effectiveness. 

Alongside economic requirements, our procurement strategy takes account of criteria such as health, quality, safety, social factors, and environmental protection. Evonik deploys significant resources in implementing its procurement strategy and particularly in identifying, mitigating, and eliminating social and environment-related risks and impacts in the supply chain. These resources include a procurement team dedicated to sustainability, risk, and compliance as well as the procurement and use of specialized software solutions for risk management and audits, such as EcoVadis. 

Global procurement is managed from Germany, with the support of regional units in Asia and North and South America. In 2024, we sourced raw materials and supplies, technical goods, services, energy, and other operating supplies with a total value of €10.5 billion (2023: €11.3 billion) from around 33,000 suppliers. Local sourcing accounted for about 76 percent of this amount (previous year: 75 percent)[1]. Raw materials and supplies accounted for 50 percent of the procurement volume (previous year: 47 percent). Spending on petrochemical feedstocks was around €3.7 billion and accounted for 70 percent of our raw material base.

SUPPLY CHAIN MANAGEMENT

With our efficient purchasing organisation, we ensure the long-term supply of necessary raw materials and at the same time generate competitive advantages for our operational business.

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TFS-INITIATIVE

Harmonizing global standards in the supply chain creates transparency and makes it easier for both suppliers and customers to reliably assess and evaluate sustainability performance. The chemical industry set up the Together for Sustainability (TfS) initiative for this purpose in 2011. Evonik is one of the six founding members of this initiative. 

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RAW MATERIALS

We source a wide range of different raw materials due to our extensive product portfolio. We have implemented strategic procurement concepts and management systems for raw materials whose availability is essential for our production processes.

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MASS BALANCE APPROACH    

Mass balance involves mixing virgin fossil and renewable or circular raw materials into existing systems and production processes. The renewable amount is then allocated mathematically to specific products and is certified by a neutral third party to verify the use of renewable or circular resources across all stages of production.

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TRANSPORTATION SAFETY & LOGISTICS

Safe transportation of goods is very important for us. We use a uniform process to select logistics service providers for transportation. We also regularly review their performance. 

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Many of our products are based on the use of advanced processes and technologies, which we are continuously improving. At many of our sites, we have backwardly integrated production complexes where we produce key precursors in adjacent production facilities. The benefit for our customers is the high reliability of supply.

Efficient production facilities and a well-stocked innovation pipeline are crucial elements in Evonik’s business model. Continuous optimizations in both areas are therefore a matter of course to us. In many cases, we develop and use proprietary production processes that have a technological edge.

Our largest production sites – Marl, Wesseling and Rheinfelden (Germany), Antwerp (Belgium), Mobile (Alabama, USA), Shanghai (China) and Singapore – have integrated technology platforms used by various units. This results in valuable economies of scale and maximizes the use of material flows because by-products from one production line can be used as starting products for others.

Evonik believes that key technologies like biotechnology and nanotechnology are essential to find solutions for pressing future challenges.

These technologies can play a major role in increasing the use of renewable raw materials and in improving the efficient use of resources. Social acceptance is vital for the long-term viability of products based on these technologies. Evonik is committed to responsible use of biotechnology and nanotechnology in dialog with society. It only markets or uses such products and methods if safety and environmental compatibility comply with the state of the art and the latest scientific findings. Evonik places strict limits on research and use of new technologies. These are derived from ethical values and, in particular, respect for human life and dignity. 
Evonik has therefore issued company guidelines on the responsible handling of nanotechnology and biotechnology.

NANOTECHNOLOGY

For Evonik, nanotechnology represents a key technology with considerable economic relevance, both because it is generally important in a variety of production processes and products, and because it can potentially be used in such a broad array of chemical applications.

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BIOTECHNOLOGY

Responsible use of biotechnology to improve life, today and tomorrow.

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Evonik bears a high level of responsibility for the safety and quality of its products throughout their entire life cycle and for protecting people and the environment. To evaluate the safety of our products, we need toxicological and ecotoxicological data.  Until now, animal studies have often been the only way to obtain reliable data on certain issues.

In a number of countries, legislation requires animal studies to be carried out to obtain data on chemical substances.

Evonik has such animal studies carried out exclusively by certified testing institutes in accordance with national and international legal requirements. Renowned test institutes are selected and audited for this purpose. In addition, our framework agreements oblige the test institutes to comply with the highest quality and animal protection standards.

COMMISSIONER FOR ANIMAL WELFARE

To meet its high responsibility for animal welfare, Evonik has established an Animal Welfare Officer. The Animal Welfare Officer has scientific training, reviews the relevant key data on animal studies collected in the Group and uses a forum to exchange information with the product stewardship functions on progress in the development and regulatory acceptance of alternative methods. It also coordinates the auditing of testing institutes (e.g., framework contract partners).

AVOID ANIMAL STUDIES

The aim is to reduce the number of laboratory animals as much as possible or to avoid animal studies altogether in the future. To avoid animal studies, Evonik draws on data that has already been published and uses alternative methods and approaches known as "New Approach Methodologies"(NAMs). In addition, joint studies of the same substance are conducted with other manufacturers.

Evonik actively promotes the development of alternative methods to animal studies. For example, the company is a member of the EPAA (European Partnership for Alternative Approaches to Animal Testing) and supports the SET (Stiftung zur Förderung von Ersatz- und Ergänzungsmethoden zurEinschränkung von Tierversuchen / Foundation for the Promotion of Alternative and Complementary Methods to Limit Animal Testing) foundation. Evonik is also involved in ecotoxicological and toxicological issues and methodological developments in the risk assessment of chemicals through its membership of ECETOC (European Centre of Ecotoxicology and Toxicology of Chemicals) and Cefic-LRI (Long Research Initiative).

Evonik acts according to the 3R concept*: Reduce-Refine-Replace.

* Source: Russell, W.M.S. and Burch, R.L., The Principles of Humane Experimental Technique. Methuen, London, 1959. Reprinted by UFAW, 1992: 8 Hamilton Close, South Mimms, Potters Bar, Herts EN6 3QD England. ISBN 0 900767 78 2